The Transfer of Stamp Manufacture from the American Banknote Company to the Bureau of Engraving and Printing
The year 1894 marked a new era in the manufacture of United States postage stamps. Since 1847, the contract for printing stamps had been awarded to various printing companies, the last being the American Banknote Company whose most recent printings included the "Baby Banknotes" of 1890, Scott 219-229, as well as the 1¢ to $5 Columbians.
On July 1 of 1894 the American Banknote Company of New York City handed the reins over to the U.S. Bureau of Engraving and Printing in Washington D.C., where stamps are printed to this day. This transfer included, among other things, all existing stamps, dies, rolls and working plates of the current issue as well as previous issues, and all of the paper stock on hand. For some reason, the name of the paper manufacturer was not passed on to the Bureau, and when the supply of paper American turned over was exhausted, the Bureau was forced to find another provider.
It is thought that the Bureau did not have enough time to make their own designs, dies and plates to meet the public demand for stamps in the first few months of takeover and therefore simply incorporated the American Banknote definitives for regularly issued stamps, much as American and Continental before them had done. To distinguish their stamps from American's, primarily addressing the issue of liability, the Bureau added triangles in the upper corners of the designs, stamps we now know as the "First Bureaus" or the "Triangle" Series of 1894, Scott 246-263.
It is interesting to note that some of the "Triangles" were printed on the soft porous paper that the American Banknote Company turned over to the Bureau in July of 1894. These can be distinguished rather easily from their later counterparts printed on the newer, slightly harder and thinner paper of the Bureau's new paper source. The earlier printings of the "Triangle" Series can also be distinguished by their perforations. The Bureau was new to mass production of postage stamps and the equipment used to perforate the stamps had not yet been perfected. The first "Triangles" often have perforations with quite ragged edges, many experienced collectors can sort unwatermarked "Triangles', Scott 246-263, from their watermarked counterparts, Scott 264-278, merely by the raggedness of the perforations.
The Addition of Watermarks to U.S. Postage Stamps
The Bureau of Engraving and Printing was not entirely new to the printing of stamps. In addition to printing paper money and securities, they had been printing revenue stamps since 1862, and had been using watermarked paper, by law, on the revenue stamps since at least 1878.
When the Bureau took over the printing of regularly issued stamps in the middle of 1894, they were obviously aware of the law that required government securities to be printed on watermarked paper and most likely felt that since stamps fell under the broad window of securities, they too should be printed on watermarked paper. For whatever reasons, the Bureau did not implement this policy until at least the end of the year, possibly as a cost saving measure, wishing to avoid the waste of dumping the unwatermarked paper stock turned over by the American Banknote Company. This makes sense, in that the Bureau had won the printing contract by proposing the lowest bid and they were not in a position to waste any resources they might have had.
Since the first stamp on watermarked paper was issued in April of 1895, with an earliest known usage of May 2, 1895 (for Scott 265), and a commonly accepted lag time of between 2 to 3 months between production and distribution, it is fairly safe to assume that the first printings of U.S. postage stamps on watermarked paper was sometime in the early part of 1895. This adds credence to the idea that watermarks were added as a control measure and in accordance with the law governing securities, rather than the idea that it was primarily a deterrent to counterfeiters.
In something of a coincidence, in that same year the famous 2c "Chicago" counterfeits were discovered. This led to the conclusion that watermarks were added to U.S. stamps as a security device aimed at deterring counterfeiters in direct response to the Chicago counterfeits. Most authorities feel this highly unlikely since the Chicago counterfeits were "discovered" on April 8, 1895 and the watermarked one cent stamp was issued three weeks later on April 29, 1895. It would have been an impossibility for the Bureau to have been informed of the counterfeits on April 8 or 9, have a committee reach a decision to print stamps on watermarked paper, design the new watermark, require the paper manufacturer to add this new watermark and provide the paper to the Bureau, print the sheets of stamps, allow the ink to dry (usually about a week or so), gum and perforate the sheets, and issue the sheets to Post Offices all in less than three weeks. Further, if the threat of counterfeiting was so great, why did the Bureau wait so long to issue the 15c and 50c stamps on watermarked paper? These were not issued until nearly two years later, when the existing stock on unwatermarked paper was exhausted.
The impression that watermarks were added to U.S. stamps as a security device, as a direct response to the Chicago counterfeits, persists. In reality, there are probably three reasons watermarks were added to U.S. stamps:
•1. A federal law stated that all U.S. securities were to be printed on watermarked paper and the Bureau may have regarded postage stamps as "securities".
•2. A watermark would make identification of the paper manufacturer and printer possible. The Bureau of Engraving and Printing had no way of knowing that they would be printing stamps for many years to come, the government could award the contract to a private printing company at any point in the future. The watermark would help identify a stamp as having been printed by the Bureau.
•3. And yes, a watermark if clearly visible, could provide a means of thwarting counterfeiters, since a watermark would be difficult to imitate.
The USPS Lettering on the Watermarked U.S. Stamps
As mentioned above, the Bureau of Engraving and Printing had been using watermarked paper to print money, securities and revenue stamps since at least 1878. The design was a simple set of the letters "USIR", for "United States Internal Revenue". For revenue stamps "USIR" made sense, but for postage stamps, changing the lettering to read "USPS", for "United States Postage Stamp", made sense. The size and spacing of the lettering was maintained, and for the most part, the first two letters "U" and "S" are fairly indistinguishable between the "USIR" and double-line "USPS" watermarks.
Almost fifteen years later, the Bureau began to get serious about cost cutting measures and made a series of experiments aimed at reducing uneven paper shrinkage and the associated paper waste. The first experiments were the "China Clay" and "Blue Paper" experiments of 1909 aimed at strengthening the paper, but were deemed unsatisfactory. The next experiment concerns us here, the watermark was reduced in size from the double-line USPS to the single-line USPS, again in an attempt to strengthen the paper by reducing the amount of paper removed in the watermarking process. The results were acceptable and the single-line watermark was implemented. The only commemoratives the single-line watermark appear on are the Panama-Pacific Exposition Issue of 1913, Scott 397-404. The only regularly issued stamps the single-line watermarks appear on are the Washington-Franklins.
In 1916, a mere six years later, with the advent of World War I and the associated cost-consciousness, the fact that unwatermarked paper could be produced cheaper than watermarked paper, and the realization that the nearly invisible single-line watermark was hardly a deterrent to counterfeiters, the Bureau decided to substitute the cheaper unwatermarked paper for postage stamp production. U.S. postage stamps have been printed on unwatermarked paper since, with two notable exceptions, the "error" stamps Scott 519 and 832b.
All-in-all watermarks on U.S. postage stamps were used for only a short time, from 1895 to 1916. Yet these watermarked stamps present some of the most interesting challenges to modern U.S. philatelists.
H. A. Froom's study: "USPS WATERMARKS" available from the APRL library
Winthrop S. Boggs' study "U.S.P.S.: NOTES ON UNITED STATES WATERMARKED POSTAGE STAMPS" Reprinted from THE LONDON PHILATELIST - July, 1958 also available from the APRL library